B R Ambedkar’s wisdom has shaped and nurtured India’s governance in a multidimensional manner. His contribution as an architect of the Constitution and a prominent voice of justice is widely acknowledged, but his legacy as India’s earliest and sharpest economic thinker still remains elusive to many.
Long before India had its own Reserve Bank or a stable currency system, Babasaheb was writing about money, what gives it value, how it should be managed and why a country like India needs to control its own financial future. When he was 22 years old, Ambedkar arrived at Columbia University, New York, as the first Dalit student abroad. In 1915, he received an MA for his thesis, ‘Ancient Indian Commerce’. The following year, he submitted a thesis for his PhD degree, ‘The National Dividend of India: A Historic and Analytical Study’. Later on, this was enlarged and published as The Evolution of Imperial Provincial Finance in India.
On his return, in November 1918, Ambedkar was appointed professor of Political Economy at Sydenham College of Commerce and Economics in Bombay. In July 1920, he moved to London to further pursue his studies in Economics. He completed his MSc thesis, titled ‘Provincial Decentralisation of Imperial Finance in British India’ in June 1921. In 1923, he wrote a groundbreaking thesis titled ‘The Problem of the Rupee: Its Origin and Its Solution’. These were not mere academic works. They emerged as a bedrock for India’s financial and monetary system in the years to come.
These works were a deep dive into how a weak monetary system could weaken a nation. During his time at the LSE, he studied the Indian currency system not just as an academic subject but as a lived reality affecting millions back home. His thesis was the first serious attempt by an Indian scholar to explain how colonial monetary policies were weakening the Indian economy from within. He clearly explained the manner in which the relationship of the Indian rupee to the British pound was artificially manipulated by the colonial rulers, putting a crushing financial burden on the Indian economy.
Ambedkar questioned the very foundation of India’s currency system. He offered solutions that were bold, practical and visionary, proposing that India adopt the gold exchange standard, a more stable and modern approach being followed by many developed countries at the time. This would tie the value of the rupee to a gold-backed currency like the British pound, bringing in more predictability and fairness in exchange rates. More importantly, he called for the creation of an Indian authority, something like a central bank, that would have full control over currency issuance, monetary policy and inflation management.
His thesis didn’t stay confined to library shelves. In 1925, just two years after its publication, he was invited to present his views before the Hilton Young Commission. This commission was tasked with reviewing India’s entire monetary framework, and Ambedkar offered it a well-researched economic roadmap. Nine years later, the RBI was established in 1934 through an act passed by the British government. This act had his intellectual fingerprints all over it. His doctoral thesis inspired the setting up of the Finance Commission of India and his works acted as a beacon in framing guidelines for the RBI Act, 1934.
Ambedkar believed that without sound economic planning, social justice would remain incomplete. For him, money was not just a technical issue, it was tied to human dignity, labour and opportunity. A weak economy, he believed, would always push the poor further into suffering. In all of this, his aim remained clear — to build an economy that protects the vulnerable and promotes fairness. He also supported state-led development and planned industrial growth.
During his time as labour member on the Viceroy’s Executive Council, he introduced several pro-worker policies, such as regulated working hours, maternity benefits, and dispute resolution boards. He was instrumental in shaping the water, power and labour welfare policies. He was one of the founders of employment exchanges in our country. He also pushed for the better management of water resources through institutions in the form of the Central Water Commission, the Central Technical Power Board, the Damodar Valley Project, the Hirakud Dam Project and the Sone River Project, among others.
In an era of global financial uncertainties, Babasaheb’s arguments about financial discipline and real-value currency are more important than ever. As we move toward a world of digital currencies, AI-driven financial decisions, and decentralised finance, Ambedkar’s emphasis on transparency, control, and fairness remains our best guide. His concerns regarding what gives money value, who controls it, and how to protect the common citizen from financial shocks, still hold. His emphasis on how inflation disproportionately harms the poor, and his insistence that currency must be managed responsibly, still echo in today’s policy debates. India’s inflation-targeting framework, its resistance to reckless monetary expansion, and the emphasis on welfare-centric policies, financial inclusion and direct benefit transfers are all in line with Ambedkar’s thinking.
Ambedkar was the mind behind some of India’s earliest and most important economic ideas. His economic ideas were not just about numbers but also justice, dignity and self-reliance. The RBI and the Finance Commission and the creation of waterways infrastructure, in many ways, are living embodiments of that vision. Today, under the visionary leadership of Prime Minister Narendra Modi, the nation is on cusp of becoming the third-largest economy in the world. As India prepares for its next phase of economic growth to realise the goal of Viksit Bharat, adherence to the economic wisdom of Babasaheb is a fitting tribute to the noble soul.
The writer is Union Minister of State (I/C) for Law and Justice, Minister of State for Culture and Parliamentary Affairs, and Lok Sabha MP from Bikaner
